Dean Baker: The deficit hawks have a record of incompetence and caused the economic disaster

Further fiscal folly
Before we take deficit hawks' advice on slashing social security, they should explain how they missed the $8tn housing bubble
By Dean Baker
February 22, 2011

The people insisting on cuts to social security and Medicare have revved themselves up and are now in high gear. They see their final victory on the horizon, with the possibility of a bipartisan deal involving substantial cuts to both programmes. They argue that the large deficits facing the country make it imperative that we address the long-term budget problem – meaning, the cost of these programmes – immediately.

.... where were the current group of anti-deficit crusaders back in 2002-2006, when it might still have been possible to do something to stem the growth of the housing bubble before it reached such dangerous levels? Well, they were crusading against the budget deficit, of course.

Peter Peterson, the Wall Street investment banker who is the patron saint and financier of much of the deficit crusade, was paying for the "Fiscal Wake-Up Tour", which was supposed to alert people to the dangers of the country's budget deficit. This travelling roadshow of policy wonks and economists had nothing to say about the growing housing bubble that was about to explode and sink the economy.

Now that we are experiencing an economic disaster – 25 million people unemployed or underemployed, millions of people facing the loss of their homes, more than 10 million underwater with their mortgages – as a direct result of their incompetence, these same people are telling us again about the urgent need to cut social security and Medicare. The deficit hawks somehow think that their case is more compelling because of the damage done by their incompetence.

Read the full article at:

http://www.guardian.co.uk/commentisfree/cifamerica/2011/feb/22/economics-economy?INTCMP=SRCH

Economics for Republicans isn't about MATH adding up, or a collection of observations from historical data. It's not about having made predictions in the past that came true, or having proposed policies that delivered measurable gains in prosperity, nor anything profane as that. It's about WHAT IT MEANS TO BE AN AMERICAN. It's about faith. It's about morality. It's about these truths we hold to be self-evident. And the first among these obvious moral truths is this: Working people should be poor and poor people should be utterly destitute, bent figures picking through piles of filth and rubbish in search of a recyclable can, a moldy heel of bread, or a discarded penny. For that is the only way, the ONLY way, that we can be SURE that rich people are getting the pay that they deserve.

You know Mr. Baker, there are some issues that you just can't reduce to a stack of grubby dollar bills, and there are some ideas whose worth can't be assessed with your crude "mathematics", or "track records" or "histories of being dead wrong". These are things we already know in our hearts without looking at a jumble of numbers or wading through the contentious gabble of economic historians. We call those ideas MORAL VALUES.